How utility scale storage is a game-changer for renewable energy

“We can’t have renewables – What happens when the sun doesn’t shine and the wind isn’t blowing; we’ll have to use fossil fuels anyway” – its an assumption repeated ad infinitum by clean energy detractors, and until recently met with awkward silence as the logistics of renewable energy integration are carefully explained, despite an often less than perfect understanding of the technicalities.

All that is thankfully about to change, as we usher in the dawn of the fully carbon-free electricity grid, and we can now start to engage with the some of the vaguaries surrounding renewable energy with newfound optimism.

Variability in renewable electricity output is currently balanced in the same way that supply is balanced – by gas turbines – when coal or nuclear cannot ramp up or down quickly enough to follow demand evenly. Combined-cycle gas turbines or CCGTs are cheap to install and easy to operate, and so far have not contributed much to the overall cost of integrating renewables as their grid balancing role has shifted. This is due to the large proportion of gas turbines within most electricity grids, with gas constituting 22% of global electricity generation as of 2014.

This back-up power is therefore an established component of the grid, but does not yet add much to the overall cost of renewable energy integration. In the UK, with solar capacity at 13 GW equating to an output of 3.5% of the annual load supply, the cost of integration including ‘back-up’ is negligable at only 2% of the cost of today’s solar. A new Aurora analysis shows that tripling the capacity of solar in the UK would increase these costs by a factor of five; however, as the cost of solar and wind continue their rapid decline, the overall cost of renewables will still be lower than other forms of energy in most use cases.

And this is without utility scale battery storage.

The current global installed capacity of battery energy storage systems was 1.5 GW in 2015, and is expected to double by the end of the year, reaching 14 GW in 2020, according to a recent GlobalData report. Energy storage costs should fall by almost 50% during this time period, and by 70% in 15 years according to a joint report conducted by DNV GL and PriceWaterhouseCoopers, working with 23 experts. Citi Group is already predicting 240 GW of battery storage by 2050.

While this is all good news, what this really means is that the overall cost of renewables integration will become even cheaper, as grids are able to utilise more and more different sources of electricity generation, and optimise energy output efficiently. With solar and wind set to fall in cost by another 60% and 30% respectively over the next decade, this will make the total cost of zero-carbon electricity systems significantly lower than any other form of energy.

The reality is that renewables start to get difficult to integrate at penetrations above 20%, unless storage or some other technology is employed. As intelligent grid infrastructure is created, this will mean a number of different technologies complementing each other to achieve high efficiencies at low cost. In addition to the 250 GW of grid-scale batteries, which equates to over 25% of the 915 GW EU28 electricity capacity or 966 GW US capacity (where about 50% of capacity is used at any one time by either), this should mean that solar and wind output are able to increase significantly. The EU28 also has a target of 10% grid interconnection by all member states by 2020, and other measures can be employed such as demand-side response, which is the controlled or staggered uptake of demand by residential or industrial users to lower the peak demand on the system, and can be achieved via smart metering, incentives, grid-connected vehicles and home storage, among others.

Ultimately, the deciding factor is cost, and if it is easier to dump (curtail) excess renewable energy capacity because of an extremely low cost factor, this may be what operators opt for. However, in order to reach 100% carbon-free electricity, they will need to employ other technologies to make up the unavoidable gaps created by intermittent energy sources, and battery power looks imminently set to become the cost-effective answer.

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